Hey BP, 

My wife and I are in the process of potentially making our first real estate investment and purchasing a 4-plex. We will be using a conventional mortgage, putting 5% down, and paying the Mortgage Insurance upfront at closing. Seller has agreed to pay closing costs. My wife's parents have a HELOC on their current house and would are going to let us use/borrow some of it to go towards our upfront expenses at closing and potentially for any updates we want to do at the property. Our plan is to live in the property for a year and then potentially refinance, pull out some of the equity, and reinvest it on another property. We would repay money borrowed with interest to my inlaws and then they have already said they would like to reinvest that again with us.

    Obviously, borrowing money from family has it's pros and cons and we certainly want to do things the right way. My question is, what is a good structure or terms to borrow from family? (I understand that can vary depending on countless variables) What is a fair interest rate to borrow from family? 8%-12%? 

    Thanks in advance for your feedback. We're newbies trying to join the real estate investing game. I've spent the past year trying to learn, gain knowledge, and analyze deals. And we're ready to take the next step forward towards our first deal.